January 24, 2014

Unemployment falls to 8.3% in California

Unemployment fell to 8.3 percent in California last month, state officials reported, reflecting a continued strengthening of the state’s economy.

Unemployment fell to 8.3 percent in California in December, officials reported Friday, as the state’s economic recovery continued to plod along.

The new unemployment rate represented a decline from 8.5 percent in November, although the Employment Development Department said payroll jobs grew by a lackluster 13,600. Economists tend to put more faith in the payroll figure, which is based on a broader survey, than they do in the unemployment rate.

Sacramento’s unemployment rate also fell, to 7.6 percent from 8 percent a month earlier. Payrolls grew by 1,000 jobs in December in the Sacramento area, including an extremely unusual gain of 700 jobs in the construction industry.

“The warm weather is helping. Plus, with the economy improving, people want to to fix up their house,” said EDD labor market consultant George Marley.

On the statewide level, “the low job growth is discouraging, but it is only one month, and the overall trend is positive,” said Irena Asmundson, chief economist with the state Department of Finance. “We’ll be monitoring the situation closely.”

The December numbers paled in comparison with November, when employers added 50,300 jobs. But in a month that saw generally weak job growth across the country, California’s gains weren’t insignificant. Beacon Economics, a Los Angeles consulting firm, noted that California captured 18 percent of all the jobs created in the United States during December.

In addition, economists note that when the economy is improving, the payroll surveys have trouble keeping up with the growth and the numbers are usually revised upward a month later. The November job gains, for instance, were originally reported at just 44,300.

On the other hand, the December numbers also reinforced the notion that California is caught in a “bifurcated recovery” that has showered most of its prosperity on the big coastal communities. The Bay Area generated 82 percent of the state’s job gains, said Stephen Levy of Palo Alto’s Center for Continuing Study of the California Economy.

“The San Francisco peninsula job market remains on fire from San Francisco to San Jose,” he said in an emailed statement.

State officials said California employers have added 235,700 jobs in the past year, a gain of 1.6 percent. In Sacramento, year-over-year job growth totaled 17,900, a 2.2 percent gain.

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